(London) The British hygiene and food giant Unilever will separate from its ice cream division which includes the giants Ben & Jerry’s and Magnum and whose sales disappointed last year, and wants to boost its margins with a savings plan which envisages 7,500 job cuts.
“A demerger” of the ice cream division with a separate stock exchange listing “is the most likely separation route”, but “other options will be considered in order to maximize returns for shareholders,” Unilever said in a statement.
Unilever hopes to generate savings of around 800 million euros over the next three years and its restructuring “should have an impact on around 7,500 jobs” worldwide, he explains.
The expected reduction in jobs corresponds to almost 6% of the workforce.
“These proposals will be subject to consultation,” specifies Unilever, which indicates that its restructuring costs will reach around 1.2% of its turnover over the next three years, a slight increase compared to previous projections.
Unilever intends to boost its growth and margins, as part of a strategic plan unveiled in October to boost its performance.
Since taking the helm of the company in July, Chief Executive Hein Schumacher “has taken decisive action, launching a 1.5 billion euro share buyback last month and pledging to accelerate margin growth, undermined in a context of inflation following the pandemic and the war in Ukraine,” comments Victoria Scholar, analyst at Interactive Investor.
Unilever, also known for Dove soaps, Ax deodorants and Knorr soups, has been passing on soaring costs in the face of inflation for months. The group nevertheless warned this summer that price increases would ease.
“Offbeat” ice creams
Investors applauded Tuesday’s announcements and the group’s stock rose 3.76% to 3,955 pence Tuesday around 6 a.m. (Eastern time) on the London Stock Exchange.
These announcements “would have been influenced by the activist investor” and American billionaire Nelson Peltz, who has served on the board of directors since 2022 and “made similar changes” at Unilever rival Procter & Gamble, continues Mme Scholar.
The group explained last year that it wanted to focus on 30 “driving” brands which jointly represent 70% of the group’s revenue, and was aiming for organic growth in turnover of 3 to 5%.
The group saw its net profit fall by 15% last year.
Under pressure to improve performance, Mr. Schumacher welcomed last month the fact that margins are starting to recover, but judged that the group’s “competitiveness” remained “disappointing”.
Unilever’s ice cream division achieved a turnover of 7.9 billion euros in 2023.
According to Matt Britzman, analyst at Hargreaves Lansdown, “Ice cream has always seemed out of step with other product lines, performing poorly in recent times. »
They “present distinct characteristics compared to other operational activities”, argues Unilever, citing in particular “a supply chain and points of sale supporting frozen products” or even “greater seasonality”.
Unilever, which hopes to finalize the split by the end of 2025, was also marked in 2021 by a dispute with its American subsidiary Ben & Jerry’s, which considered that the sale of its ice cream in Israeli settlements in the West Bank and East Jerusalem was not “compatible” with its “values”, a conflict “resolved” in December 2022 by a confidential agreement.